Newcastle Investment to Acquire Holiday Portfolio for $1 Billion

The REIT will be the new owner of 52 senior housing properties located in 24 states.

Newcastle Investment(NYSE:NCT) has gone to market, and as a result it's going to another market to scare up some capital. The real estate investment trust announced that it has signed an agreement to acquire a large portfolio of senior housing properties from subsidiaries of privately held Holiday Retirement. The price is just over $1 billion.

The Holiday Portfolio, as Newcastle terms the purchase, consists of 52 properties housing nearly 5,900 units spread across 24 states. All properties are private pay facilities, and collectively they boasted an occupancy rate of 91% as of the end of September.

To help fund the purchase, Newcastle is floating nearly 50.5 million shares of its common stock in an underwritten public issue for gross proceeds of roughly $264.9 million, placing the per-share price at around $5.25. Additionally, the offering's underwriters have been granted a 30-day purchase option for up to an additional 7.5 million shares.

In addition to helping to pay for the Holiday Portfolio, the company said it may also use the take from the issue for "general corporate purposes." These could include fresh acquisitions of properties or other assets.

The Securities arms of Credit Suisse(NYSE: CS) and UBS(NYSE: UBS) are the joint book-running managers of the offering, which is expected to close on Friday.

At the moment, Newcastle has almost 294.5 million shares outstanding, and its stock most recently closed at $5.34 per share.

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Eric has been writing about stocks and finance since the mid-1990s, when he lived in Prague, Czech Republic. Over the course of a varied career, he has also been a radio newscaster, an investment banker, and a bass player in a selection of rock and roll bands. A native New Yorker, he currently lives in Los Angeles.